In a move that’s shaking the foundations of the global tech supply chain, Samsung Electronics’ largest union has confirmed it will proceed with an 18-day strike starting next week. Despite management’s efforts to restart negotiations, the union stands firm on demands that could upend the company’s lucrative AI semiconductor business, with ripple effects stretching far beyond South Korea’s borders.

Negotiations have been deadlocked for months, centered around performance-based bonuses linked to the company’s record-breaking profits—profits driven almost entirely by high-bandwidth memory chips used in AI infrastructure. The union demands abolishing a bonus cap and allocating 15% of operating profits to worker bonuses. Samsung counters with a 10% proposal and a one-off payout, arguing that the union’s demands threaten long-term sustainability. That gap between 10 and 15 percent represents roughly $1.9 billion annually, a sum management fears could destabilize their financial model.

The stakes are colossal. Samsung’s Q1 profits soared to an unprecedented level—almost $90 billion—with the chip division accounting for 94% of that. The company’s market valuation crossed the $1 trillion mark, doubling the Lee family’s wealth in a year. Yet, workers say their compensation has lagged behind, especially relative to rival SK Hynix, fueling resentment. The union’s refusal to engage further unless their demands are met has led to a formal strike notice, with management warning that the shutdown could cause billions in losses daily.

Adding pressure, the South Korean government has stepped in—warning that a strike could cause economic damage exceeding hundreds of trillions of won. The prime minister has hinted at using emergency powers—an almost unprecedented step—to prevent disruptions, citing the chip sector’s vital role in the nation’s exports and global supply chains. A strike at Samsung could ripple through the entire semiconductor industry—from materials and chemicals to equipment—potentially causing months of inactivity that could devastate global markets already strained by AI-driven demand.

Recent history shows the industry’s fragility. The union’s previous strikes were short but pointed—each one testing the limits of their leverage. This time, with the AI supercycle generating record profits, the workers are demanding their share. Samsung’s management has issued rare public apologies, emphasizing their “family” ethos amid the crisis, but the core dispute remains unresolved: will the company share its AI-fueled bounty or tighten its grip, risking a catastrophic shutdown? The upcoming negotiations could determine whether South Korea’s tech giant manages to avoid a self-inflicted crisis or plunges into a prolonged production halt that could stall the global chip supply for years.